MCI quits U.K. mobile race
|
|
April 13, 2000: 7:03 a.m. ET
US giant drops bid for new-generation cellular license as offers soar
|
LONDON (CNNfn) - MCI WorldCom dropped out of the auction for a new-generation U.K. mobile phone license Thursday, leaving seven firms to contest five licenses in a bidding war that has spiraled in value to more than three times analysts' initial estimates.
MCI WorldCom withdrew after the 121st round of the auction having bid $3.17 billion ($5.04 billion) Wednesday for license D, one of the least valuable licenses on offer.
The third-generation licenses will allow operators to provide high-speed Internet and data access from cellular phones and are seen as most valuable for the U.K.'s four existing mobile operators. All four are expected by analysts to secure a franchise. One license is reserved for a new entrant.
The value of the highest bids after the latest round totaled £18.56 billion, with Vodafone AirTouch (VOD) making the highest offer with a £4.66 billion bid for license B. Vodafone and British Telecom (BT-A) have been squaring off for B, the most sought-after license.
"It is currently impossible to predict the end of the auction process," Merrill Lynch analysts said in a research note to clients this week, noting that consumers would ultimately foot the bill for the higher-than-expected prices being offered.
The other top bids in the first of Thursday's five auctions came from Canada's TIW, Spain's Telefónica, Nasdaq-listed cable firm NTL (NTLO: Research, Estimates) and Vodafone's soon-to-be-sold Orange unit. BT and Deutsche Telekom's (FDTE) One2One are also still in the running.
The auction will continue until only one bidder remains for each of the five licenses available.
MCI WordCom (WCOM: Research, Estimates) shares closed down 1 at 41-3/8 Wednesday.
|
|
|
|
|
|